ByNicole Itano, CorrespondentFebruary 11, 2010

Athens, Greece — Thousands of civil servants gathered to protest Greece’s proposed austerity measures Wednesday at Klafthmonos (crying) square, a locale that has a long relationship with vocal public dissent.

But as Greece’s eurozone partners prepare to bail the country out of its current debt crisis, the mood on the streets is as resigned as it is angry. Many Greeks say they know a day of reckoning has come.

“I’ve had this store for 40 years and business is worse now then it’s ever been,” said George Ziazios, who owns a flower shop in central Athens. “The government has to stop the tax evaders and cut the civil servants. They have to take action.”

For decades, Greek governments of every political stripe have caved to union and worker demands, meeting protests with promises of handouts. But the country’s current government, under pressure to cut spending, has pledged to break that cycle.

Tighten your belts

A year ago, when farmers blocked roads with their tractors, Greece’s government -- then controlled by the center-right New Democracy party -- gave them half a billion euros, more than $635 million, in loans and compensation for destroyed crops. This year, the four-month-old Socialist administration of George Papandreou held firm against similar demands. The government’s repeated message: There’s no more money in state coffers and all Greeks must tighten their belts.

Polls show that nearly two-thirds of Greeks recognize the seriousness of the problem and support the need for austerity measures. But the question is whether that support will hold as the measures begin to bite.

Taxi drivers are one of the first groups to feel the impact of the fiscal crisis. Facing new gas taxes and a change in the way their income tax is calculated they went on strike Thursday, leaving many Athens commuters struggling to get to work.

Stathis Dokoros says he usually brings in about €110, or $150, during each 12-hour shift, but that higher gas taxes will force him to put €20 of that back into the tank. The economic crisis has also cut the number of passengers by 10 percent.

“It’s hard work and little money, and it’s getting worse,” he says He joined the strike and turned out for the protest, but he acknowledged too that he wasn’t the only one hurting.

“We know we have to help, but it shouldn’t be just us,” he says. “They need to take the money from the rich people too and the ones who stole money, like the ministers.”

Leaders must sacrifice, too

That’s a frequent refrain here. Greeks say they’re willing to make sacrifices, but want to know their leaders aren't reaping the benefits. The government is trying to prove the pain is being shared equally and has announced caps for the salaries of chief executives at state-controlled companies and a 90 percent tax on bankers’ bonuses.

Greece’s government feared, and unions hoped, that Wednesday’s protest and nationwide strike by civil servants would launch a wave of popular resistance against the proposed austerity measures. But although another major strike is scheduled for Feb. 24, there’s no sense that public anger is about to boil over as it did in December 2008, when the Athens was hit by weeks of riots.

There is widespread acknowledgment that this mess is of Greece’s making. Most Greeks, especially older ones, credit the European Union and the euro with bringing political and economic stability to the country after decades of war and dictatorship. It’s their leaders they blame.

“It’s more expensive now, but if you have euros, you know what you have. With drachmas, you were never sure,” says Dimitris Psihogios, another taxi driver. “The European Union has been good for us.”

Mood could shift if cuts deepen

But the mood could shift if the cuts become deeper. Many analysts predict that any European bailout will come with harsh conditions and include demands for further cuts to public spending. George Pagoulatos, an associate professor at the Athens University of Economics and Business, thinks that would be a mistake.

“I think it would be wiser to focus on succeeding in implementing these reforms, rather than seeking further wage cuts and harsher measures which risk alienating society,” he says. “There’s another risk there -- that society will turn anti-European if these reforms are seen as being imposed by the European Union.”